Two cheers for welfare reform

By
David R. Francis /
August 21, 2006

Tuesday marks the 10th anniversary of welfare reform, the law that was supposed to put "welfare queens" to work. Or, to be more accurate and polite, the law that was supposed to end the dependence of needy families with children on government cash assistance by promoting job preparation and employment.

Two cheers, not three, says Douglas Besharov, a fellow at the American Enterprise Institute, another Washington think tank. "We don't need a ton of self congratulatory do-nothing talk," he adds.

"It's not like it's a complete triumph," says the Brookings Institution's Ron Haskins, author of a new book, "Work Over Welfare: The Inside Story of the 1996 Welfare Reform Law."

The reform did, as President Clinton promised, "End welfare as we know it."

The state-administered program now is more about helping low-income mothers get ready for and keep jobs and less a system of cash handouts. There are time limits on benefits. Federally imposed work requirements get tighter in October.

Since passage of the law, the number of families nationwide getting welfare cash payments has shrunk by an amazing 60 percent. In 1996, 4.6 million families received cash benefits. Not quite 2 million get cash payments today.

The change reflects the fact that 1.5 million more low-income mothers have gone to work. And they are being rewarded for the effort involved. Their incomes are considerably higher, on average, than they would be if they were still receiving only welfare money. The median income of a welfare family rose from $7,196 in 1997 to $11,820 in 2002. But more than two-thirds of such families remain poor by federal definition. Like their middle-class counterparts, most low-income mothers, married or not, work or are being trained for a job.

Today, the welfare program costs Washington $16.5 billion a year in fixed block grants to the states. Because of inflation, the real value of those grants has shrunk 30 percent since 1996. Altogether, the states spend $10 billion on top of the federal grants for welfare.

By Washington standards, welfare is no longer a major cost. By comparison, this year's emergency bill to cover costs of the Iraq and Afghanistan wars came to $67.6 billion. The Social Security Administration expects to pay $539 billion in benefits this year to 49 million people.

Nowadays, states spend a majority of their "temporary assistance" funds on benefits and services other than cash assistance. It goes for child care, transportation assistance, and other programs to make work more feasible for low-income mothers. Most of that money goes to families not receiving welfare cash.

American taxpayers expect able-bodied adults to support themselves and their families. One reason for the old welfare system's unpopularity was a suspicion on the part of taxpayers that it encouraged women receiving welfare to have children out of wedlock and increased crime rates.

But as author Haskins notes, the evidence that welfare leads to more crime, more bad behavior, or more out-of-wedlock births is "weak to nonexistent." Nonetheless, the American public saw welfare as the root of many social ills and wanted change.

Research showed overwhelmingly that old-style welfare prompted low-income mothers to work less or not at all. In those days, if they got a job, they could lose other benefits – food stamps, Medicaid, etc. Welfare mothers were almost better off watching TV at home.

To encourage work, in years before and after 1996, Congress altered 30 laws to help low-income families, including the Earned Income Tax Credit. Welfare costs were shifted in part to other programs.

Experts see a need for more action. For one thing, the new program doesn't help low-income males.

Ms. Waller wants the states to better inform the federal government on how they are spending welfare money to help find what works and what doesn't.

Olivia Golden, who was in charge of implementing the 1996 law under Clinton, notes that the law did not improve the welfare of low-income children. Now at the Urban Institute in Washington, she calls for more government investment in better child care, Head Start, and Early Head Start. She wants better unemployment insurance (only one-third of workers are covered) and more paid parental leave. She also advocates a hike in the minimum wage.

As baby boomers enter retirement, all these welfare children will be needed "to support us as we get old," she says.